Disruptive Technology Turns 11; Creator Set to Break Through $1T

It was the worst kept tech secret of all time; and though everyone knew it was coming, no one predicted how the iPhone would change the world. 11 years after its launch, Apple is now poised to become the first ever $1T company.

While people published rumors and others guessed at design, buyers began to camp outside stores days in advance to snag a $600 device they’d never seen. Before its release, the hype for an Apple-devised phone was off the scale. It even garnered the nickname the “Jesus phone” — or “jPhone”. Some felt it would be miraculous, while most believed it could in no way live up to the hype.

It wasn’t the first time in tech history a frenzy was create over a new device. The first whispers came in the summer of 1944: a Hungarian inventor living in Argentina had created something sensational. On the day of its release, New Yorkers “trampled on another” in 1945 to buy the first commercially available ballpoint pens, where they paid the equivalent of $175 in today’s money. That was for a pen, not an Ubersmart mobile device that connects you to the universe.

Despite drawing hordes of fans, the iPhone didn’t immediately charm its way into the mainstream because of its high price tag. Just two months after the iPhone’s initial release, Apple trimmed the handset’s price down to $400. That helped a little, but it wasn’t until 2008 — when Apple unveiled the iPhone 3G with a new $200 price tag and access to the faster 3G network — that the smartphone exploded in popularity. Apple sold over 10 million iPhone 3G units worldwide in just five months.

It wasn’t the faster network or the price tag that really set the iPhone ahead of its competitors. Apple’s core philosophy, then and now, is that software is the key ingredient; and the operating system lying beneath the iPhone’s sleek and sexy touchscreen broke new ground. Unlike other cellphones’ software, the iPhone’s operating system was controlled by Apple rather than a mobile carrier.

Just as the Apple II in 1977 was the first computer made for consumers, the iPhone was the first phone whose software was designed with the user in mind. It was the first phone to make listening to music, checking voicemail and browsing the web as easy as swiping, pinching and tapping a screen — pleasant like a massage.

“An iPod, a phone, an internet mobile communicator,” Jobs said when preparing to introduce the iPhone in 2007. “An iPod, a phone, an internet mobile communicator…. These are not three separate devices!” Apple put a miniature computer in consumers’ pockets.

But that wasn’t enough for iPhone users. Operating on a closed platform, the iPhone was limited to the few apps that Apple offered — and the handset was restricted to one U.S. carrier — AT&T. The iPhone’s software limitations gave birth to an underground world of hackers seeking to add third-party applications, known as the Jailbreak community. And the AT&T exclusivity created a subset of that hacker community focusing on unlocking the iPhone to work with various carriers — today famously known as the iPhone Dev-Team.

Apple did benefit tremendously from iPhone hackers. The company learned from the Jailbreak community that third-party applications were in high demand and would add even more appeal to the phone. This revelation led to Apple opening its iPhone App Store, which launched concurrently with the second-generation iPhone, iPhone 3G.

Fast forward. The iPhone turned out to be a game-changer – the proverbial paradigm shift wrapped in a sleek black case housing powerful innovative technology. It has gone on to Impact the lives of hundreds of millions of people around the world, changing the way we communicate, work, learn and play.

77.3 Million iPhones were sold in the fourth quarter of 2017. Assuming that each boxed iPhone weighs approximately 500g, give or take, that’s around 39,000 metric tons of iPhones, which is the equivalent of 630 Abrams M1A2 battle tanks. The Sales volume works out to almost ten iPhones a second, and they sold for an average of $796. This is how Apple will likely crest $1T this year.

Just like that, Apple flipped cellphone business on its head and transformed mobile software into a viable product. But the most surprising thing about the iPhone is the impact it’s had on six major industries.

The PC Industry – Apple’s stroke of genius was to put one in your pocket. Until the iPhone shipped, PC sales were around 400 million a year. As the iPhone and smartphones in general have become critical tools for information, used for productivity, communications and pleasure, the PC has become less important to many people. Until the mobile revolution that came with the iPhone, the only way people could access the Internet was from a PC or laptop.

Today, thanks to the iPhone, iPad and all the Android equivalents inspired by Apple’s ideas, people have many more options to make the connections they need regardless of location. Consequently, the PC industry is now shipping only about 275 to 290 million PCs a year, and this has caused a level of industry consolidation that is now concentrated around Lenovo, HP, Dell, Acer and Apple.

Telecom – Before the iPhone, most of the original telco business models were around voice. Voice over IP became popular by 2000 and had already started pushing the telecom companies to move to digital voice instead of traditional landline voice delivery methods. But with the advent of the iPhone, they were effectively forced out of the traditional voice business altogether. While there were millions of payphones in place a decade ago, Try and locate a payphone today.

Now, telecom providers are data communications companies whose business models have been completely transformed. All have added things like information and entertainment services, and all have become conduits for multiple types of data services to their customers.

Movie and TV – In order to watch a movie, you once had to go to a movie theater; and to watch a TV show, you had to sit in front of my television at home and scan three channels….plus PBS. The iPhone created a mobile platform for video delivery, and since 2007, every major movie and TV studio has been forced to expand their distribution methods to include downloaded and streaming services to mobile devices.

We can thank the millions of iPhones in the field, capable of letting people watch video anytime and anywhere, for prodding these studios to make this so. We can also thank the iPhone for fueling new types of video services like YouTube, Netflix and Hulu — video powerhouses, at least 50% of whose content is viewed on some type of mobile device.

Software distribution. With the launch of the App Store, Apple shook up the mobile industry again by reinventing software distribution. Apple designed the App Store’s model with a do-it-yourself mentality: All software developers had to do was code an interesting app, submit it to the App Store for approval and market the app however they wished.

The App Store’s method is proving far more effective than the old-fashioned computer shareware model, where developers would offer a free trial of their apps and then cross their fingers that consumers would eventually pay. The shareware model especially didn’t help independent coders, whose apps got trampled on by large software companies with fatter marketing budgets.

Video Gaming. Before 2007, most games were either delivered by way of game consoles, a PC or a dedicated handheld device like the Nintendo DS or Sony PlayStation Portable. The iPhone expanded the market for mobile games as well as created an entirely new category of touch-based gameplay, persuading even holdouts like Nintendo to come aboard with games based on its iconic franchises.

And though the mobile dominant free-to-play model fractionalizes revenue, the potential for brand exposure is unprecedented: Niantic’s augmented reality-angled Pokémon Go alone has been downloaded over 750 million times. Contrast with Nintendo’s entire Mario franchise’s lifetime sales of just over 500 million.

HealthCare. Today, one can use an iPhone to monitor various health metrics as well as access detailed health information, connecting with health professionals and even receiving health advice virtually anytime and anywhere across a number of different applications. And we’ve only begun to see how smartphones can impact the health industry – an impact that will doubtless expand as this industry embraces the smartphone for outpatient care.

And HealthLynked will be a huge part of this. We are not unlike the iPhone. Where multiple apps do one thing, we are combining all that makes mobile health great into one easy to use, secure platform. It’s sort of a Swiss Army knife, meets iPhone meets medicine, wrapped in the sleek, easy to use interface of a social platform. You can find it in the Apple Store.

JUNE 29, 2007: IPHONE, YOU PHONE, WE ALL WANNA IPHONE, by Brian X. Chen. Brian wrote a book about the always-connected mobile future called Always On (published June 7, 2011 by Da Capo). Check out Brian’s Google Profile.

How Apple’s iPhone Changed These 5 Major Industries, By TIM BAJARIN June 26, 2017. Tim is recognized as one of the leading industry consultants, analysts and futurists, covering the field of personal computers and consumer technology. Mr. Bajarin is the President of Creative Strategies, Inc and has been with the company since 1981 where he has served as a consultant providing analysis to most of the leading hardware and software vendors in the industry.